Erica Javellana joined Zappos.com, Inc. in 2007 as a Human Resources Generalist where she quickly rose through the ranks to lead the team as the Employee Relations Manager. We sat down with her recently to gain insight on what other businesses can learn from Zappos’ unconventional organizational structure.

By developing a company culture and committing to it, you can make a positive change within your organization. Zappos.com has grown their business because of their unique culture and the service they provide to their customers. Prior to her upcoming keynote at BizConCLE, we sat down with Zappos Insights’ Speaker of The House, Erica Javellana to talk more in-depth about finding your company’s culture and what it takes to bring about organizational change.

Q: What is one takeaway you want people to walk away from your keynote having learned?Javellana: It’s about finding your culture. And the most important thing about that is committing to it. You can have a mission statement. You can claim to have a culture. But if you’re not committed to that, it’s a moot point. The emphasis has to be on finding your culture. Find what works best for you and what defines your company and culture and commit to that. You can list off all you want from your value statement, but it doesn’t mean anything if you’re not going to live by it.

It starts with the onboarding process and being transparent to the candidates when you’re bringing them in. If you hire the right people, you get the right culture. People will understand what they’re coming into. You can tell them, “We’re not a company that just says it. We’re going to walk it.” When I first started at Zappos, the hiring manager told me that all of the basic foundations I knew about HR were great and we want that. But everything else, just ignore because what we’re doing here is we’re willing to make exceptions to the rule. It created an environment where autonomy speaks volumes. We hire adults and treat them like adults. Let’s trust our employees to be adults and make smart choices. Autonomy is important. Trust your employees. And tell them when they’re brought on and when they’re interviewing that you’re a company that lives its core values.

Q: Is it possible to change a company’s culture entirely?

Javellana: Absolutely. And it depends on scale. I hear people say all the time, “I just don’t have that kind of clout.” Of course you do. Maybe it’s not to go straight to the CEO or the VP or the president, but you can begin making those small changes in your job, or your department, or your team. Be that part of the change. Everyone else is going to be wondering, “What is that department so darn happy?” Those are the small changes you can make in your own power. Change your mindset. Love what you do, be passionate about what you do, and it will trickle over to others. People always say, “I’m just a whatever.” Well, be the best damn whatever you can be. That’s going to trickle down.

Q: What’s the most important lesson you’ve learned working at Zappos?

Javellana: You’ve heard of KISS: Keep It Simple Stupid? It’s a cliché, but the most important thing I’ve learned is really simple: You can’t have happy customers if you don’t have happy employees. It’s so simple, but it’s huge. That alone drives the quality of customer service and your company’s brand. We believe if our employees are happy, our customers will be happy. People expect that we have some sort of secret formula at Zappos and it’s not a secret formula. If you follow the simple clichés and commit to them, you will be surprised. I think people overanalyze things.

As an early investor in companies such as Facebook and Netflix, Mark Thompson knows a thing or two about identifying the ingredients that go into making a successful company. In advance of his keynote presentation at this year’s BizConCLE event on Oct. 12, Mind Your Business had the opportunity to sit down and get Thompson’s unique takes on how to attract capital, what the next business disruptors will be, and what challenges business owners might be facing in the future.

Read on below to find out what Thompson had to say about these issues and more …

Q: Without giving away the store, what’s one key takeaway you want people to come away with after listening to your presentation?

A: I want them to know how finding the right talent can be a game changer for businesses. It’s all about finding the people who are connecting with your customers and finding people who have the willingness to grow and scale. You want to find those people who are customer-focused, believe in the business and are willing to have an open-minded attitude.

In growing markets like Cleveland, that battle for talent is acute, so having a strategy to find people who add all three of the characteristics I just mentioned is key. Then, you have to help these people develop those skills. That ends up being your recipe for success.

Q: What are the best ways for a business to raise the capital it needs to fund growth?

A: The specifics depend on the capital you’re raising: venture capital, small business loans, tax credits, etc. But in terms of getting funded, generally the people who take a bet on you will do it because you have demonstrated you can grow your business in changing times. They love to see a great track record; that always sells a banker. They like to see the humility to be able to change and to be willing to grow. They also want you to be open to looking for ways to improve things on behalf of your customer.

Everyone knows it’s never a straight line when it comes to business and the customer is always changing. You want to be characterized as having some flexibility. You want to make—and keep—promises. You want good, quality testimonials from your customers. Those kinds of third-party endorsements show what you have been able to achieve.

Q: What’s the biggest challenge you see businesses struggling with today?

A: I talked about this a little bit before but I really think it comes down to finding talent and finding someone who believes in your business and their willingness to feel connected to the business. It takes more than money to attract people to your business. You attract talent with meaning. They want to work with people they believe in, trust and that have their long-term development in mind. This also means caring about the larger life they lead and I’m talking about Boomers as well as Millennials.

People do want to feel connected to the work they do and the people they do it with. Think about your mission, your vision. As humble as the business might be, you still want to trust your boss and believe in what she’s doing. Leadership matters more today than ever before.

Q: What do you think is going to be the next business “disruptor” people are going to have to deal with?

A: What we’ve found is that you need to be the change you wish to see. In Cleveland particularly, when you’re walking down through the neighborhoods and looking at the way they’ve been transformed, that takes leadership. That shows a willingness to work with these communities and that they wanted to lead the change rather than be run over by it.

You have to make it happen before it happens to you. It’s your role to continue to lead the change and find opportunities to serve your customer better, faster and cheaper and have empathy for the customer. Whether you’re a B-to-C or B-to-B, you’re seeing the world our customers live in is changing so fast. The winners are those who recognize that. You want to be that partner with your customer and have shared objectives. Boy, that will really start to separate you in a world where there are a lot of short-term-isms.

In Cleveland, you have a context for having a long history and building long-term relationships. That’s your strategic advantage. Use it. Your customers have to change and you can help them change.

Q: What’s one thing no one is talking about that’s going to be on everyone’s mind 12 months from now?

A: In a year from now, we’ll be talking about companies expanding domestically and also how you can participate globally in the economy. One way to think about your business is how the product or service you’re offering in Greater Cleveland could be offered in other cities, states and countries around the world. Start thinking about that larger dream.

Related to that, think of more and more ways to partner with your customer by developing different programs or solutions that address their needs. Behave like you’re more deeply integrated with them. Even if you’re in the product business, you’re still providing a service.

Happy, engaged employees are good for any team or organization. Research shows they are more creative, more productive, make better decisions, offer better service, and are more willing to go the extra mile.

What's more, happiness is as contagious as the flu, but it creates a positive vibe that leads to further engagement. To bring more of that into your team, focus on what positive psychologists have identified as the three tiers of happiness: pleasure, engagement, and meaning.

Pleasure is the stuff of the moment. When you provide donuts on a Friday morning, offer someone a spot bonus, take the team out for a celebration dinner, or offer someone a specific bit of positive feedback for an achievement, you are creating a moment of happiness and connection. It is important that you, as business owner or leader, create or sponsor such moments, for they let people know you care.

Engagement is feeling connected to what one is doing. While no one argues with more pay, what many people want more is clarity about their role and expectation, the opportunity for growth and learning, and having a voice in decisions. When you prioritize communication and practice delegation and inclusion, you contribute to this dimension of happiness at work.

Meaning is the deepest level of positive emotion that emerges when a person feels connected to their life mission, or believes that what they are doing is in support of a greater purpose. Many times there’s little in a job that will connect people to life purpose, yet you as a leader/owner can take time to learn what your people truly value, and support their finding that in their work or life. As an example, you may have a mom in a clerical role whose life revolves around her family. The job may never fulfill her, but if you can support her in balancing work with being there for family events, you’ll earn more loyalty from that employee, who will show up more fully for you.

Consider whether you are actively encouraging these things in the people on your team:

Do they enjoy their relationships and their environment at work?

Do they fill roles that fit their skill sets and offer appropriate challenges?

Do they understand where they fit in, and feel they're a part of something that matters?

Do they know where they stand?

Do they have a voice?

Do they laugh and have fun?

If the answer is no to any of these questions, brainstorm how you can adjust the team environment to bring more happiness in. As a leader, you're not responsible for "taking care" of all these things, but you ARE responsible for making sure they are addressed.

Have open conversations, and ask your team what they need to better support their enjoying themselves, feeling connected, and making a difference.

Remember, Leadership is not about a title: Anyone can be a leader who fosters dialogue and a positive workplace environment.

Jim Smith, PCC, is The Executive Happiness Coach ®. Jim’s passion is to help build a happier world and workplace, one leader at a time. He supports leaders and business owners through 1:1 coaching, team facilitation for change, and inspirational keynote speaking. He has coached leaders in 27 countries and on 6 continents to create stronger personal presence, improve confidence, and improve business outcomes. Contact: Jim@TheExecutiveHappinessCoach.com.

Most companies don’t have an in-house attorney. If they did, do you know what those corporate attorneys would do most of the time? As a former in-house General Counsel, I can tell you it all fell into two buckets: proactive and reactive. You wanted it to be a lot more of the former and a lot less of the latter. More planning for disasters and avoiding them equals less time, less energy, less stress and less money spent reacting to them. Government agencies, plaintiffs and plaintiffs’ lawyers that start investigations when a disgruntled employee or customer or a curious investigator files a complaint; all of them mean one thing with certainty – legal fees. It seems obvious because it is obvious.

The way to be proactive is to conduct a good old-fashioned internal audit. You have to take it seriously and you have to pretend to be someone else. It’s tough, it’s time-consuming, but it’s worth it.

And here’s the thing: you don’t need to have an in-house GC in your office to do that for you. In fact, you really don’t even need an outside attorney to do that for you, though relying on one will be much more helpful, for reasons I’ll mention in a minute. Like a lot of things in my world (now as outside general counsel to other businesses), if you study up and plan well enough, then doing an audit with a good lawyer is better than doing one with a bad lawyer, doing one with a lawyer is usually better than doing one without one, but doing one without one can be better than not doing one at all, and that’s what most companies do — or don’t do. Most companies don’t audit themselves. That keeps their lawyers much busier later on, when they’re reacting and responding to subpoenas, lawsuits and investigations.

Here’s how you do it:

Step 1: Create a written plan. I use a gantt chart. I love gantt charts. If you don’t know what a gantt chart is, go google gantt charts. Every good project needs one. It’s a chart that shows you a visual, calendar-style depiction of who’s doing what and when. (Another little nugget you pick up in-house, along with how to read financial statements and how to use excel for things other than shopping lists.) Business people have outpaced lawyers in this area for years.

Your plan or gantt chart will specify all the tasks in your audit, name the person responsible for each task, and state how long that task will go from a start date to an end date. Go ahead, google it and you’ll see what it looks like. In fact, google some combination of “internal audit gantt chart” and you’ll see what other folks have done.

Step 2: Identify the universe of legal exposure areas that your company is likely to have. One way of thinking about this is picturing your company as a leaky bucket and trying to figure out what’s likely to cause those leaks. Another image I like to use is something Tony Robbins uses. It’s a car or bike wheel divided into pie-pieces radiating outwards from the center, with each pie only going out as far as the company is compliant in that area. When one pie piece is shorter than the other ones (because, for example, hiring practices are 60% compliant while most of the other areas are 90% compliant), your car or bike is going to have a bumpy ride.

Step 3: Next, get specific. Drill down in those leaky areas to the ones specific to your business. Here, talking to a lawyer helps.

Let’s do an aside here. Here are a couple of reasons why talking to an attorney at this stage is helpful. The first is issue-spotting. For example, on the employment piece of your bucket / wheel, your business lawyer will ask you if you have independent contractors. If you do, one of the drill-down areas will be proper classification of contractors and employees. Another issue your business lawyer will spot is proper exemption classification. A misclassification of a true employee as a disguised contractor, or of a non-exempt employee as an exempt employee, is a major leak, a major bump in the wheel that is your business. Don’t get that wrong. But it’s hard to spot those issues if you’re not a lawyer. So that’s one reason why it helps to talk to one.

Another really good reason to have an attorney run your audit is that she’s more likely to be objective. Business owners are like parents of small children, or writers of crappy novels. They think their creations are better, or smarter, or more interesting than they actually are. I can’t tell you how many times I’ve had to wake clients up from the sweet slumber of blissful ignorance, simply because they had fallen madly in love with the exceptional analytical skills they’d gleaned from that one semester of business law at Cleveland State (no offense to Cleveland State).

One of the best reasons to have a lawyer conduct your audit though is the attorney client privilege. With few exceptions, you can protect your compliance audit and all the nasty cobwebs it uncovers with a confidentiality that may be far stronger than any non-disclosure agreement you’ve signed with your employees, assuming you’ve signed one (something a good audit would uncover and a good lawyer would issue-spot). Lawyers don’t need such agreements. Confidentiality is an ethical obligation for us and we can lose our ticket if we don’t comply with it. If your lawyer is guiding your audit, and stamping your plan and your findings with a “performed at the direction of counsel” label, and you don’t waive the privilege by (for example) posting it online or sharing it with your girlfriend, your audit should be protected from later subpoenas.

But I digress…

We’re drilling down.

If your lawyer is involved, he’s creating more specific compliance areas based on the type of business you run and the facts and circumstances inside your business. If you’re a manufacturer, one specific area within the government regulation pie may be OSHA compliance or environmental compliance. If you’re a retailer, one specific area under government compliance may be FTC (Federal Trade Commission) or CSPA (Consumer Sales Practices Act) compliance.

If your lawyer is not involved, you may be able to get close by googling (is that a real word now?) “Ohio employment compliance areas” or “[your state] safety compliance” or “[your industry] government regulations”. Spend a lot of time on this and try to create a hierarchy of compliance areas as best as you can.

Step 4: Create a compliance checklist for each area. Again, there’s a lawyer and a non-lawyer answer here. Lawyers will pull checklists from Lexis or Westlaw or Practical Law or some other research database for each compliance area specific to your business from Step 3. If you’re not a lawyer, you may still be able to buy access to one of these databases, or you can google that too. Creating good checklists is really important.

Another aside: whether you do or do not use a lawyer, don’t expect a perfect checklist or a perfect audit. The goal is to plug big leaks, the ones that either draw the most attention from plaintiffs’ lawyers and government agencies, the ones that have the highest rates of investigation, the ones that have the highest exposure points, the ones that will cost you the most if you get it wrong. Again, employee classification tends to be a big-ticket item. Same with IT security and customer contracts. If you’re in a regulated industry, agency activity among your peers tends to be well known and easy to research. Your particular business will also have its own priorities.

I start with Pareto’s Principle: what are the 20% of compliance issues that tend to be responsible for 80% of the exposure? I then expand that to 30% or 40%, until I can account for 90%-95% of the exposure points in terms of liability and expense. This is probably more art than science, but you’re unlikely to create a 100% compliant company without making the audit process more of a pain than it’s worth.

One way to do this is to prioritize your drill-down areas and your checklist items into high-, medium- and low risk items, and note them as such on the checklist. Later, when you create a report card, you’ll use weighted values to create a sliding scale of scores based on the risk level of each item.

Step 5: Create your team. Choose them wisely, assign tasks and then meet with them to explain. Employee communications should be on a need to know basis. Let employees not involved in the audit go about their business and their lives without worrying about what an audit might mean. When we do one for our clients, we do an introductory call or meeting with managers at various tiers of the company who will be involved in the audit. Managing communications is important to avoid panic or anxiety. We tell managers that this is intended to help the company keep more of its money and stay out of trouble, nothing more. We tell them it’s not intended to embarrass or punish anyone, just identify and fix legal issues. They tend to be receptive to this message.

We also talk about confidentiality, candor and integrity of the process. This is important and should be carefully scripted.

Step 6: Document requests and spot checking.

Here we/you will send a document request to the people in your company most likely to have relevant documents. If you get any pushback, you’re probably on to something. Review the documents closely against the checklist items specific to documents. If you’re in a regulated industry, there are probably disclosure obligations or magic language about privacy or warranties or something similar. They often need to match the regs verbatim.

Many of your document requests will involve spot checking. Sometimes you’ll want to send someone trustworthy to file locations to pull their own documents. For checklist items that don’t involve documents (for example, is there a proper eye washing station in your garage bay, if one is required; are fire extinguishers located where they’re supposed to be, etc.), you or your lawyer or your designee will physically go to the department to observe compliance or non-compliance.

Step 7: Conduct interviews. This is necessary to learn about processes and practices that are difficult to read in a document or observe when spot checking. I use the “funnel technique”, where you start with open-ended questions and then drill down to the compliance checklist items, veering off when you hear something worthy of a detour. If you’re delegating to managers, coach them on how to conduct proper interviews.

Step 8: Make written findings. At this point, you’re going to generate a report. Ideally, your checklist was specific enough to tell you what was necessary to comply or not comply. Your finding should reference those items.

Step 9: Create a report card. Here, you’ll grade your compliance and non-compliance. We use grades like my kids use. People seem to like that. It’s easy to administer, and gives businesses goals to strive for in the next go-round. Remember that not all compliance areas are equal, and not all checklist items within those compliance areas are equal. Having an employee handbook with strict anti-discrimination policies, and having the right labor law posters on the wall, may be more important than ensuring that your vacation policy has been properly communicated to that one remote employee you have in Alaska.

Step 10: Create a fix-it report. Once you’ve identifies your leaks, create a new checklist to plug them. This is often a copy/paste job from your report card. Start with the high dollar / high-risk items and work your way down, flagging any show-stoppers (or as one of my friends calls them, door-closers). Assign each fix to a particular manager and create a new gantt chart that says who is doing what and when.

Step 11: Follow up. You’re almost there. Don’t waste all that effort. You need to follow up on the fixes to make sure they’re getting done, and then you need to do a periodic follow up on the entire audit to make sure no one’s sloughing off and that your car is still running on a smooth wheel. I recommend revisiting your audit at least every six months, at the very least on the high-dollar items. You also want to revisit your checklists once a year to ensure that new regulations haven’t created new compliance areas or new individual checklist items.

So, okay, I know that seems like a lot. If you’ve read this far, though, then you’re either my mother or a business-person who’s interested in operating free of legal problems in our business. Take my word for it — or don’t, you know this already: be proactive, be a boy scout, be prepared. You know I’m right.

And now you know what in-house counsel do for their clients, and what former in-house counsel do for their clients when they start a law firm.

Finding new, profitable customers is an ongoing high priority task for all small businesses. If you have tried some of the tactics promoted you know, that it is not as easy as to set up a LinkedIn or Facebook account, to tweet or blog to increase customer visibility.

From my work with many small businesses I found that the key to all successful marketing efforts is to know who your potential customers are, what challenges keep them up at night, what information they are looking for and, maybe the most important one, how they expect to find this information. Without having a good answer to these questions, we can spend all our resources to create the best blogs, sophisticated websites or the best LinkedIn or Facebook sites without seeing any results.

To find the answer, we need to get back to our profitable customers whom we currently serve, and their market niches, to define markets and potential customer groups that would likely see similar advantages in our products and services. Only if we know how we help our current profitable customers solve their challenges and how they prefer to get their information, do we have a starting point to act. The emphasis here is on the word “profitable”.

The best way to find those customers, you need to start dissecting your financial statements and looking at profits and opportunities created by your customers. Yes, this is tedious work and you might not like or want to accept what you find. In most cases our profitable customers, those who buy our high margin products and services, are the ones you know the least about. To answer the next question “why do they prefer buying from you” will require connecting with them and asking them some of the following questions:

Why did you start buying from us

What value do we provide to you (which nobody else provides)

What do you see as our strength

What do we do that others don’t or didn’t

What frustrates you about our industry as a whole

What one word would describe our products and services best

By listening intently to their answers, you can get a very good feeling for your value proposition. You should use these touch points to further your relationship with key people in your customers’ organization. If you don’t sell on price, your value proposition and relationship to the customer will help to retain this account.

The next step is to find market niches which are looking to solve similar challenges. After you decide which niche to address first, you need to evaluate (by asking potential customers in that niche) how they research and how they prefer to receive their information.

Equipped with that knowledge you are ready to define a marketing strategy that creates the best environment to attract new customers. The mix between push and pull marketing strategies should become obvious. Under push or outbound marketing we understand all the traditional activities from attending trade shows, direct or e-mail marketing, telemarketing or traditional advertising. Inbound or pull marketing provides potential customers with information they can find on their own prior to connecting with you. Most of the social media platforms help with this task. One special form of inbound marketing is the so-called content marketing, where companies provide valuable information in form of white-papers and blogs to their target audience; by gaining recognition as experts within your target market, potential customers will search websites for answers. Pay per Click (PPC) and Search Engine Optimization (SEO) are other tools often used.

So, before you embark on new marketing activities, be very clear about whom you want to attract and how these potential customers prefer to receive their information. Just by setting up a Facebook site and advertising that you will raffle off an iPad to the first five hundred visitors who link to your site, you will get exactly what you are asking for. Five hundred people interested in winning an iPad. None interested in becoming your customer.

If you have questions regarding efficient strategies to find your target market and how to effectively reach potential customers, attend our workshop at the upcoming BizConCLE October 13 and 14 or give Joe Mayer a call @ 216.408.6324.

The days of the “take-no-prisoners” organization are over. In today’s workforce results fueled by fear is no longer effective. Where culture and purpose meet, you’ll find the most vibrant, successful companies in the modern area. But first it’s important to know why the old way is the bad way.

Hidden Costs of a Negative Culture

Organizations with negative culture (i.e. cut-throat, high-pressure) may attain some financial success, but in the long run this type of negative company culture is harmful to productivity and the bottom line.

It is estimated that $500 billion is lost in the U.S. economy due to workplace stress according to the Harvard Business Review.

In addition to the bottom line, negative company culture attributes to these 3 other costs:

Health related costs; health care expenditures are nearly 50% higher

Cost of disengagement; disengaged workers have 37% high absenteeism, 49% more accidents, and 60% more errors and defects

Cost of high employee turnover; companies with a negative company culture had 50% more voluntary turnover, which in the long run costs the organization 20% of the lost employee’s salary

Positive Characteristics

There is light at the end of the tunnel. When push comes to shove, it is important to note that employees value workplace wellbeing to material benefits, every time, without fail. If your company can integrate positive characteristics into the work environment, there may be hope to stop the downward cycle.

In general, a company with a positive work environment includes the following:

Caring for colleagues as friends; treating one another with respect, gratitude, trust & integrity

Providing support for one another

Avoiding blame and the forgiveness of mistakes

Emphasizing the meaningfulness of the work

Company Culture Takes Cues from the Top

In order to initiate and ingrain a positive company culture into your organization, it all starts at the top. You’ve heard the term “fish rots at the head”, in this case “positive culture starts at the head”.

In a Forbes article about how to create a winning company culture, leadership is about what you do, not what you say. Words are cheap, they must be acted on in order to have value.

Begin the transition to a positive culture by stating a clear purpose. Establish a clear mission statement as a starting point. Clearly define to not only the public, but more importantly to the members of your organization the following: